LONDON (AP) -- The United States and Britain on Saturday discussed new sanctions against Russia as Ukraine's week-old cease-fire showed further signs of unraveling, yet emerged with no clear plan for further targeting an economy that means far more to Europe.

After meeting his British counterpart for two hours, U.S. Secretary of State John Kerry said he was confident that the U.S. and its European allies would respond with "very serious" measures to cease-fire violations by Ukraine's rebels and their Russian backers. He said trans-Atlantic talks on the matter would continue.

"We know to a certainty what Russia has been providing and no amount of propaganda is capable of hiding these actions," Kerry told reporters.

Last week's cease-fire agreement was not vague or optional, he said, but that Russia and its proxies are complying only in a few places while seizing land and resupplying forces.

Ukraine's military on Saturday reported attacks over the past day that killed a serviceman and wounded 40, with mortars reaching the fringes of Mariupol, among other places. The rebels said Ukrainian forces shelled 15 locations overnight, including parts of Donetsk, the largest separatist-controlled city.

Late Saturday, the two sides completed an exchange of prisoners as laid out in the cease-fire agreement reached by the leaders of France, Germany, Russia and Ukraine.

Kerry and British Foreign Secretary Philip Hammond held Moscow responsible for continued violence. Kerry pointed to the strategic port of Mariupol, which Ukrainian forces say is threatened by a buildup of rebel military equipment. If the rebels seize the city, they would establish a land corridor between mainland Russia and the Russia-annexed Crimean Peninsula.

"What's happening with respect to Mariupol even now is just simply unacceptable, so we are talking about additional sanctions, additional efforts," Kerry said. He added: "We're not going to play this game. We're not going to sit there and be part of this kind of extraordinarily craven behavior at the expense of the sovereignty and integrity of a nation."

But Hammond was more restrained, making no mention of sanctions even as he criticized Russia's "continued aggression" and systematic cease-fire violations. "We will talk about how we maintain European Union unity and U.S.-European alignment in response to those breaches," he said before their discussions.

The U.S. has warily backed the European diplomatic effort despite little faith in the Kremlin changing course, while repeatedly invoking the threat of new sanctions if Russia doesn't cut off the separatists.

Economic measures against Russia in the past year have severely damaged the country's economy, without forcing Russian President Vladimir Putin to shift policy.

But the impact of new trade or financial sanctions would be dulled without the participation of European governments that have far deeper economic relationships with Russia. Several have spoken in opposition to new action.

Even Britain, America's closest European ally, could have reservations given the billions of dollars' worth of Russian investments in London's financial center.

Many European governments also oppose any U.S. move to provide military support for Ukraine's government, fearing that might spark a wider proxy war. Kerry signaled no development on that front, saying such assistance was still under discussion among members of the Obama administration and the U.S. Congress.